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RBI Set to Hold Rates at April 6–8 Meeting as Oil Shock Raises Inflation Risk

HSBC says sustained crude above $100 would likely push inflation past 6%.

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Most private agencies have already begun to lower GDP growth forecasts for the fiscal year, and hike inflation estimates for FY27.
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Overview

  • The RBI’s Monetary Policy Committee meets Monday through Wednesday, April 6–8, and most economists expect the repo rate to stay at 5.25% with a neutral stance.
  • HSBC’s model indicates inflation would likely breach the 6% tolerance ceiling if Brent remains above $100 a barrel, increasing the chance of rate hikes later in 2026.
  • Analysts say policy signals will focus on scenarios and the RBI’s reaction function, with communication prioritized over immediate tightening.
  • Following heavy foreign investor outflows in March and a rupee slide past 95 per dollar, the RBI tightened banks’ foreign‑exchange limits and barred rupee non‑deliverable forwards for corporates to curb speculation.
  • Costlier energy threatens to raise transport and power bills for households and firms, and private forecasters have started cutting FY27 growth estimates and lifting inflation projections, with El Niño risks adding pressure.